Vornado Realty Trust

Last updated
Vornado Realty Trust
Public company
Traded as NYSE:  VNO
S&P 500 Index component
Industry Real estate investment trust
Founded1982;37 years ago (1982)
Maryland, U.S.
Headquarters,
U.S.
Key people
Steven Roth (Chairman & CEO)
Michael J. Franco (CIO)
Joseph Macnow (CFO)
Products Office buildings
RevenueIncrease2.svg $2.163 billion (2018)
Increase2.svg $0.422 billion (2018)
Total assets Decrease2.svg $17.180 billion (2018)
Total equity Increase2.svg $5.107 billion (2018)
Number of employees
3,928 (2018)
Website www.vno.com
Footnotes /references
[1]
1999 K Street NW in Washington, D.C. was developed by Vornado Realty Trust and sold for $208M in 2009. It was designed by architect Helmut Jahn. 1999 K Street NW.JPG
1999 K Street NW in Washington, D.C. was developed by Vornado Realty Trust and sold for $208M in 2009. It was designed by architect Helmut Jahn.
330 Madison Avenue, owned by Vornado 330 Mad Av from viaduct jeh.jpg
330 Madison Avenue, owned by Vornado

Vornado Realty Trust is a real estate investment trust formed in Maryland, with its primary office in New York City. The company invests in office buildings and street retail in Manhattan.

A real estate investment trust (REIT) is a company that owns, and in most cases operates, income-producing real estate. REITs own many types of commercial real estate, ranging from office and apartment buildings to warehouses, hospitals, shopping centers, hotels and timberlands. Some REITs engage in financing real estate.

Maryland State of the United States of America

Maryland is a state in the Mid-Atlantic region of the United States, bordering Virginia, West Virginia, and the District of Columbia to its south and west; Pennsylvania to its north; and Delaware to its east. The state's largest city is Baltimore, and its capital is Annapolis. Among its occasional nicknames are Old Line State, the Free State, and the Chesapeake Bay State. It is named after the English queen Henrietta Maria, known in England as Queen Mary.

New York City Largest city in the United States

The City of New York, usually called either New York City (NYC) or simply New York (NY), is the most populous city in the United States. With an estimated 2018 population of 8,398,748 distributed over a land area of about 302.6 square miles (784 km2), New York is also the most densely populated major city in the United States. Located at the southern tip of the state of New York, the city is the center of the New York metropolitan area, the largest metropolitan area in the world by urban landmass and one of the world's most populous megacities, with an estimated 19,979,477 people in its 2018 Metropolitan Statistical Area and 22,679,948 residents in its Combined Statistical Area. A global power city, New York City has been described as the cultural, financial, and media capital of the world, and exerts a significant impact upon commerce, entertainment, research, technology, education, politics, tourism, art, fashion, and sports. The city's fast pace has inspired the term New York minute. Home to the headquarters of the United Nations, New York is an important center for international diplomacy.

Contents

Investments

Notable properties wholly owned by the company include the following: [1]

New York Marriott Marquis hotel in New York City, United States

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1540 Broadway office tower in Times Square in Manhattan, New York City

1540 Broadway is a 44-story, 733 foot office tower at West 45th Street in Times Square in Manhattan, New York City. The building was the North American headquarters of media conglomerate Bertelsmann from 1992 until the company vacated and sold the property, of which they occupied all office-use floors, in 2004. The building housed US satellites of central functions such as Corporate Development, Corporate Communications and the Office of the Chairman and CEO, as well as serving as worldwide headquarters for the Bertelsmann Music Group and Bertelsmann Book Group. Current office tenants include Viacom, China Central Television, KEMP Technologies, Adobe Systems and Pillsbury Winthrop Shaw Pittman. Retail tenants are Planet Hollywood, MAC Cosmetics, Disney Store, and Forever 21.

666 Fifth Avenue

666 Fifth Avenue is a 41-story office building on Fifth Avenue between 52nd and 53rd Streets in Midtown Manhattan, New York City. The office tower was designed by Carson & Lundin and built in 1957 by Tishman Realty and Construction. Tishman sold the building when the corporation dissolved in 1976. 666 Fifth Avenue was bought by Sumitomo Realty & Development in the late 1990s, and Tishman Speyer bought it back in 2000, adding tenants before selling it yet again to Kushner Properties in 2007. In August 2018, Brookfield Properties purchased the building.

The company also owns:

555 California Street skyscraper

555 California Street, formerly Bank of America Center, is a 52-story 779 ft (237 m) skyscraper in San Francisco, California. It is the fourth tallest building in the city, the largest by floor area, and a focal point of the Financial District.

Donald Trump 45th and current president of the United States

Donald John Trump is the 45th and current president of the United States. Before entering politics, he was a businessman and television personality.

Merchandise Mart commercial building in Chicago, Illinois, USA

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History

Two Guys

The origins of the company can be traced back to the Two Guys discount store chain, founded in 1947 by brothers Sidney and Herbert Hubschman. [2] In 1959, Two Guys acquired O. A. Sutton Corporation, manufacturers of the Vornado line of electric fans, and the company was renamed Vornado Inc. [2]

Two Guys From Harrison was a discount store chain founded in 1946 by brothers Sidney and Herbert Hubschman in Harrison, New Jersey, originally selling major appliances such as televisions. The chain acquired the manufacturers of the Vornado appliance brand in 1959, and spread beyond the New York City metropolitan area to more than 100 locations in upstate New York, eastern Pennsylvania, New Jersey, Connecticut, Massachusetts, Maryland, Virginia, and as far as Illinois and California. The company's financial success started to decline in the late 1970s, and it was defunct by 1982.

Vornado Air

Vornado is a US firm based in Andover, Kansas, that designs and manufactures household fans and other small appliances related to air circulation. The current incarnation of the company was founded in 1989, two years after the death of Ralph K. Odor (1895-1987), who founded the firm in the 1930s with Ottis A. Sutton in Wichita, Kansas. In fact, the name of the company is a portmanteau of "Vortex" and "Tornado".

By 1964, the company operated over 200 stores. [3] In the 1970s, Vornado began divesting its retail operations. In 1978, the company sold 80 Two Guys locations in California. [2]

In 1980, Interstate Properties Inc., a real estate development company controlled by Steven Roth, acquired an 18% stake in Vornado, since Roth became interested in the company's real estate holdings. [2] In 1981, Interstate Properties took control of the firm after winning a proxy struggle against existing management and closed additional stores, reducing the number of stores in operation to 12. [4] [5]

Acquisition of Alexander's (1986–1995)

In 1986, Interstate Properties and Donald Trump each bought approximately 20% of Alexander's, a failing retailer whose real estate holdings included a store that occupied the entire block between East 58th and 59th streets and Lexington and Third Avenues in Manhattan. [6]

In 1988, they each raised their stakes to 27% of the company, but Trump pledged his interest as collateral for a personal loan from Citicorp and in 1991, Trump was forced to turn over his holdings to Citibank. [7]

In 1992, Roth and Alexander's creditors forced Alexander's into bankruptcy. [8]

Alexander's emerged from bankruptcy in 1993 as a real estate investment trust. That same year, Vornado Inc. was converted into a REIT, Vornado Realty Trust. In 1995, Vornado bought Citicorp's interest in Alexander's. [9]

Vornado Air licensing deal (1989)

In 1989, the Vornado name was licensed to Vornado Air, LLC, a new company formed to manufacture heating and cooling equipment. Outside of the brand licensing agreement, the Trust has no modern relation to Vornado Air, LLC.

Acquisition of properties from Bernard H. Mendik (1997)

In April 1997, the company acquired a company owned by Bernard H. Mendik in a $654 million stock transaction that added a large portfolio of office buildings in Manhattan to Vornado's assets. Mendik became co-chairman of Vornado until his resignation in October 1998. [10]

World Trade Center lease (2001)

On February 15, 2001, the Port Authority announced that Vornado Realty Trust had won the bid for a 99-year lease for the World Trade Center, offering $3.25 billion. [11] Silverstein Properties was outbid by $30 million by Vornado. However, Vornado balked over lease terms and possible tax liabilities. [12] Silverstein signed a lease for the World Trade Center in April 2001, [13] 5 months before the September 11 attacks.

2001–present

In 2001, the company acquired Charles E. Smith Commercial Realty, owner of a portfolio of assets primarily in Arlington, Virginia, in a $1.58 billion transaction. Robert H. Smith and Robert P. Kogod were added to the board of directors of Vornado. [14]

In 2005, the company bought a 32.5% interest in Toys "R" Us. [15] Toys "R" Us filed bankruptcy in 2018 and the investment was written off. [16] [17] [18]

In 2013, Steven Roth replaced Michael D. Fascitelli as CEO of Vornado. Fascitelli had been CEO since 2009. [19]

In 2015, the company spun off its interest in Urban Edge Properties to its shareholders. [20]

In 2017, the company merged its Charles E. Smith Companies subsidiary into the JBG Companies, forming JBG Smith. [21]

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References

  1. 1 2 "Vornado Realty Trust 2017 Form 10-K Annual Report". U.S. Securities and Exchange Commission.
  2. 1 2 3 4 BARMASH, ISADORE (June 13, 1981). "A CHANGE AT TROUBLED VORNADO". The New York Times .
  3. SLOANE, LEONARD (October 10, 1964). "Two Guys Stores Are Expanding". The New York Times .
  4. BARMASH, ISADORE (November 3, 1981). "VORNADO TO INCREASE STORE CLOSINGS BY 18 UNITS". The New York Times .
  5. SLOAN, ALLAN (June 2, 1992). "LOOKING CLOSER AT THE ODD BANKRUPTCY OF ALEXANDER'S INC". The Washington Post .
  6. "Trump to Acquire 20% of Alexander's". The New York Times . November 22, 1986.
  7. "Alexander's Jumps On Trump Rumor". The New York Times . May 14, 1991.
  8. "Alexander's Shuts All Its 11 Stores; Plans Liquidation". The New York Times . May 16, 1992.
  9. "Vornado and Affiliate Get Control of Alexander's". The New York Times . March 7, 1995.
  10. SAXON, WOLFGANG (May 30, 2001). "Bernard Mendik, 72, Prominent Landlord and Head of Real Estate Industry Board, Dies" . The New York Times .
  11. "Vornado wins WTC lease". CNN. Reuters. February 22, 2001.
  12. BAGLI, CHARLES V. (March 17, 2001). "World Trade Center Deal Remains in Doubt". The New York Times .
  13. BAGLI, CHARLES V. (April 27, 2001). "Deal Is Signed To Take Over Trade Center". The New York Times .
  14. Spinner, Jackie (October 20, 2001). "Vornado to Buy Commercial Arm of Smith Realty Giant". The Washington Post .
  15. "BAIN CAPITAL, KKR AND VORNADO COMPLETE ACQUISITION OF TOYS "R" US, INC" (Press release). Business Wire. July 21, 2005.
  16. Jones, Charisse (September 19, 2017). "Toys R Us files for bankruptcy". USA Today.
  17. Hals, Tom; Rucinski, Tracy (September 19, 2017). "Toys 'R' Us seeks bankruptcy to survive retail upheaval". Reuters .
  18. Bhattarai, Abha (September 19, 2017). "Toys 'R' Us files for bankruptcy amid struggle to pay down billions in debt". The Washington Post .
  19. "Michael D. Fascitelli to Step Down as Vornado's Chief Executive Officer; Steven Roth, the Company's Chairman, Appointed as Chief Executive Officer" (Press release). Business Wire. February 27, 2013.
  20. "Vornado Announces Completion of Spin-Off of Urban Edge Properties" (Press release). Business Wire. January 15, 2015.
  21. "JBG SMITH Properties Announces Completion of Its Spin-Off From Vornado Realty Trust and Its Combination With The JBG Companies" (Press release). PR Newswire. July 18, 2017.